How the New Tax Law Affects Vacation-Home Owners

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From Market Watch

By Bill Bischoff

Published: Nov 20, 2018 9:08 a.m. ET

The Tax Cuts and Jobs Act complicates things for people who rent out a second home

The tax rules for vacation homes require close attention.

If you own a vacation home that you use for both rental and personal purposes, now is a good time to plan how to use it for the rest of this year with tax savings in mind. Here’s what you need to know:

Rented less than 15 days during the year with more than 14 days of personal use

For a vacation home in this category, the tax rules are really simple. You need not report any of the rental income on your Form 1040. However, you cannot deduct expenses directly attributable to the rental period (rental agency fees, cleaning, and so forth). If your vacation home happens to be located near a major event — like a PGA golf tournament or a big multi-day concert — you may be able to rent the place out for a short period even at high rates and pay zero federal income tax.

Tax-smart year-end strategy: The more rental days between now and year-end, the better — as long as they don’t exceed 14 days for the year.

Rented more than 14 days with substantial personal use

Your vacation home falls into this category if you rent it for more than 14 days during the year and your personal use exceeds the greater of:(1) 14 days or (2) 10% of the rental days. For example, a vacation home that’s rented for 180 days during the year and used by you and family member for 60 days falls into this slot.

Personal usage includes use by you, other family members (whether they pay fair market rent or not) or anyone else who pays less than market rent. Personal use also includes time spent at your place by another party under a reciprocal sharing arrangement (“I use your place in exchange for you using my place”) whether the other party pays market rent or not.

Days devoted principally to repairs and maintenance are considered days of vacancy and are disregarded, even if family members are present while you work away.

The tax drill

Vacation homes in this category are treated as personal residences for federal income tax purposes. Follow this six-step procedure to account for the property’s rental income and all the expenses.

Step 1: Report 100% of rental income on Schedule E of Form 1040.

Step 2: Deduct 100% of any direct rental expenses (such as rental agency fees and advertising) on Schedule E.

Step 3: Allocate mortgage interest and property taxes between rental and personal use. See below for how to do that.

Step 4: Deduct as Schedule E rental expenses the allocable mortgage interest and property taxes from Step 3.

Step 5: If there’s any net rental income left after Step 4, deduct as rental costs allocable indirect expenses — maintenance, utilities, association fees, insurance, depreciation and so forth on Schedule E — but only to the point where you zero out rental income. In allocating these indirect expenses, consider only actual rental and personal-use days during the year, and ignore days of vacancy. For example, if you rent your vacation home for 90 days during the year and use the property 60 days for personal purposes, allocate 60% of the maintenance, utilities, and so forth to rental usage and 40% to personal usage. The 40% is non-deductible. Even so, the bottom line on Schedule E will often be zero, because the rental income will often be fully offset by deductible expenses.

Step 6: Write off the personal-use percentage of mortgage interest and property taxes as itemized deductions on Schedule A of Form 1040, subject to the new Tax Cuts and Jobs Act of 2017 (TCJA) limits for 2018-2025 (see “TCJA changes affecting vacation-home owners” below).

You are allowed to carry over any disallowed allocable indirect expenses to future years when you can deduct them against rental profits (if you ever have any).

Controversy regarding how to allocate mortgage interest and property taxes

The IRS says you should use only actual days of personal and rental usage to allocate all non-direct vacation-home expenses, including mortgage interest and property taxes. However, two Appeals Court decisions say you can allocate mortgage interest and property taxes differently, by treating actual rental occupancy days as rental days and all other days — including days of vacancy — as personal days.

Before the TCJA, the Appeals Court method was often more beneficial because (1) it allocates more mortgage interest and property taxes to Schedule A (where you could usually fully write off these expenses as allowable itemized deductions under prior law) and (2) it allocates less mortgage interest and property taxes to Schedule E, which usually allowed you to currently deduct more of the other expenses allocable to rental usage (property insurance, utilities, etc.) on Schedule E when applying the rental income limitation.

But after the TCJA changes, some vacation-home owners may benefit from using the IRS-approved method instead of the Appeals Court method. That’s because you will never get any tax benefit from allocating more interest and taxes to Schedule A than you can currently deduct after the TCJA changes. Your tax pro can run the numbers at tax return time and figure out the best allocation method for interest and taxes.

Tax-smart year-end strategy: If your property fits solidly into this category for 2018 and your expenses will comfortably exceed rental income (the usual situation), you will probably come out ahead by renting it out for some additional days between now and year-end. That way, you’ll receive more rental income (good for cash flow), and you can probably still offset all the rental income with direct expenses, allocable mortgage interest and property taxes, and allocable indirect expenses. So you’ll have that much more tax-sheltered rental income, which is always a good thing.

The bottom line

As you can see, the tax rules for vacation homes are complicated.

If you have a vacation home that is rented for more than 14 days during the year and your personal use does not exceed the greater of (1) 14 days or (2) 10% of the rental days, the home is classified as a rental property for tax purposes. (I’ll cover the tax rules for vacation homes that are classified as rental properties in next week’s column. So please stay tuned.)

TCJA changes affecting vacation-home owners

New limit on property-tax deductions: Before the TCJA, you could claim itemized deductions for an unlimited amount of personal state and local property taxes. For 2018-2025, however, the TCJA limits itemized deductions for personal state and local property and income taxes to a combined total of only $10,000 ($5,000 for those who use married filing separate status). This limitation can affect your ability to claim itemized deductions for property taxes on a vacation home.

New limits on home-mortgage interest deductions: The TCJA also places new limits on the amount of home mortgage debt for which you can claim itemized qualified residence interest expense deductions. These limits can affect your ability to claim itemized deductions for mortgage interest on a vacation home.

For 2018-2025, the TCJA generally allows you treat interest on up to $750,000 of home acquisition debt (incurred to buy or improve a first or second personal residence) as deductible qualified residence interest. If you use married filing separate status, the limit is halved to $375,000. Thanks to a grandfather provision for pre-TCJA mortgages (explained below), this change will mainly affect new buyers (those with post 12/15/17 mortgages).

TCJA change for home-equity debt: For 2018-2025, the TCJA generally eliminates the prior-law provision that allowed you to treat interest on up to $100,000 of home-equity debt as deductible qualified residence interest ($50,000 if you used married filing separate status).

TCJA grandfather rules for up to $1 million of home-acquisition debt: Under one grandfather rule, the TCJA changes do not affect qualified residence interest deductions on up to $1 million of home-acquisition debt that you took out: (1) before 12/16/17 or (2) under a binding contract that was in effect before 12/16/17, as long as the home purchase closed before 4/1/18. If you use married filing separate status, the limit is halved to $500,000.

Under a second grandfather rule, the TCJA changes do not affect qualified residence interest deductions on up to $1 million/$500,000 of home-acquisition debt that you took out before 12/16/17 and then refinanced later — to the extent the initial principal balance of the new loan does not exceed the principal balance of the old loan at the time of the refinancing.

Home-equity debt treated as home-acquisition debt: Say you spent or spend the proceeds of a home-equity loan to build, buy, or improve your first or second personal residence. The loan counts as home-acquisition debt for which qualified residence interest deductions are allowed, as long as the applicable home acquisition debt limit ($750,000/$375,000 or $1 million/$500,000) is not exceeded.

Bigger standard deductions: For 2018-2025, the TCJA almost doubled the standard deduction amounts. For 2018, they are:

  • $24,000 for married joint-filing couples.
  • $18,000 for heads of households.
  • $12,000 for singles.

This seemingly benign change can adversely affect vacation-home owners, because their allowable itemized deductions (including those for vacation home mortgage interest and property taxes) may not exceed their standard deduction amount for 2018-2025.

Finding Your Natural Talents – Here Are Five Clues


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I didn’t figure out that I had a hidden talent until I was age 47. That’s when I decided to write, what became a huge bestseller, Rich Habits, which also happened to be the first of many books I would go on to write.

For most of my adult life, I’ve been a tax specialist/CPA. My thing was numbers, not words. Or, so I thought.

Back in 2009, I had never written a book before. So, this was way out of the comfort zone for me. But, it didn’t take very long for me to realize that I had stumbled upon something I was innately good at doing.

How did I know I had found a natural talent?

Well, things you are brilliant at doing, reveal themselves in five different ways:

#1 – Brilliance Comes Easy

When you engage in an activity that is easier for you than for others, you’ve found your brilliance.

Writing came very easy to me. The words just flowed effortlessly from my brain and onto the keyboard.

We all have innate talents, or things we are just brilliant at doing. Most never discover them because, finding your brilliance, requires experimentation.

When you experiment with numerous, different activities, eventually you will stumble upon something that naturally comes easy to you; something you can do easier, faster and better than others.

#2 – Brilliance Provides You With Never-Ending Energy

When you find an activity that you can engage in for many hours, without losing energy or getting tired, you’ve found your brilliance.

I could write for five, six or even seven hours straight without tiring or getting bored. I never lost my energy. I never felt fatigued. It was as if I had tapped into some limitless supply of energy.

There is a little-known energy source that lies dormant inside each one of us, waiting to be released. This energy source is very powerful. It is controlled by the limbic system, one of the oldest regions of the brain.

In this region resides your emotions. When you find something you are brilliant at doing, you tap into the emotional centers of the brain, which then fuel all of your energy needs while you are engaged in your brilliance.

#3 Brilliance Makes Time Flies By

When you engage in an activity, and time seems to just fly by, you’ve found your brilliance.

My early morning workweek writing routine was (and still is) to write for two hours. That’s all the time I had during the workweek. Those two hours felt like two minutes. Time just seemed to fly while I was writing. In fact, it got so bad, I had to buy a timer that would go off after two hours. This way, I would not be late for work, which had happened several times.

#4 Brilliance Makes You Want to Practice

When you find your brilliance, you will desire to engage in it over and over again.

I enjoyed writing so much. In fact, I hated when that timer went off. It meant I had to stop writing and get ready for work. I just wanted to keep writing.

Because I never wanted to stop writing, I couldn’t wait to wake up the next morning to begin writing again. I started waking up earlier and earlier, every day. And amazingly, I sprang out of bed, down to my basement office and immediately began writing.

#5 Brilliance is Fun

When you find happiness and joy in doing something, you’ve found your brilliance.

Writing, right out of the gate, felt like fun. It definitely did not feel like work. Because it felt like fun, I noticed I was very happy when I was writing. Knowing that the very next morning I was going to be writing again, kept me feeling happy all day long, even when I wasn’t engaged in my writing activity. My wife was the first to notice that I seemed much happier since I had started writing.

These five clues only show up when you experiment with diverse activities.

“But I’m old. It’s too late for me.”

Stop worrying about your age. Don’t put that limiting belief in your head. I found my brilliance at age 47. Colonel Sanders (Kentucky Fried Chicken founder) found his brilliance in his early sixties.

The way I see it, ten years is going to go by no matter what you do. Why not devote a few hours a day, mining for your brilliance?

I can promise you this – if you find your brilliance, your life will improve in ways you never imagined. And, more importantly, you’ll be happy.

Success Requires Focus – How to Supercharge Your Ability to Focus


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Focus is way more than a just a habit. Focus involves an orchestra of variables that must all come together.

What makes focus so complex is the fact that it is dependent on the optimal performance of the most complex organ we possess – our brain.

Your brain never sleeps. It is constantly active. This activity can be measured by brain waves. Brain waves are the speed at which brain cells talk to one another. When you focus, your brain waves operate at a much faster frequency than normal, known as the Gamma frequency.

While in this Gamma state, your brain is sucking energy from the body at an accelerated rate, in order to provide itself with the fuel that focus requires.

Any little hiccup can throw a wrench into the brain’s ability to maintain focus. In my book, Change Your Habits Change Your Life, I list all of the Focus Killers. Below are the top eight Focus Killers:

#1 Distractions

Your environment can be a host to many distractions:

  • People – Wife, kids, co-workers, etc. can disrupt you while you are in the flow of focus.
  • Phone Calls – Ringing phones disrupt your focus. Even worse would be taking a phone call during your focus time.
  • Emails – Those annoying ding sounds you get every time you receive an email disrupts your focus. Focus becomes even more distracted if you decide to read or respond to those emails.
  • Text Messages – If you have any sound effects triggered by text messages, every chime or whistle will disrupt your focus. And, once again, reading and responding to text messages while in the flow of focus, disrupts it entirely.
  • Background Noise – If you have TV news on while you are trying to focus, those Breaking News Alerts will disrupt your focus. So too will music. Songs can trigger emotional responses that cause your mind to drift back in time to an old flame, a concert you attended, or any life event linked to a song.

The solution is to unplug from technology and block off two hours a day without any distractions. No phones ringing, hide your cell phone and turn off all background noise.

This is why I advocate waking up early and spending those early morning hours focusing on your  top priorities, which should be your personal and professional dreams and goals.

#2 Chronic Stress

Short-term stress can actually improve focus and concentration. But chronic stress is very different from short-term stress.

Chronic stress causes a cavalcade of chemical reactions within the body that produce cortisol, the chronic stress hormone. Cortisol is a chemical that impairs your ability to focus by redirecting your brain and your body’s resources. Thus, if you are suffering from chronic stress, focus will be very difficult. Death of a loved one, financial problems, marital problems, health problems, all produce chronic stress.

Study after study has concluded that aerobic (running, biking etc.) and anaerobic (weight lifting/high intensity training) exercises stifle the production of cortisol, alleviating chronic stress. Thirty minutes a day of doing both will reverse the effects of chronic stress.

#3 Sleep Deprivation

If you are not getting between 7 – 8.5 hours of sleep a night, you are very likely suffering from sleep deprivation. Since one of the most important functions of sleep is to clean the brain of toxins that build up during the day, lack of adequate sleep means toxins are building up inside and on brain cells, impairing their ability to function properly.

#4 Glucose Depletion

When glucose reserves become depleted, the brain sends a signal to stop engaging in an activity. This is commonly referred to as Decision Fatigue or Willpower Depletion. So, Willpower Depletion is really just the depletion of glucose reserves in the body.

Each individual has their own unique reservoir of willpower. Some naturally have more, some less. On average, willpower, or your ability to focus, lasts between 90 – 120 minutes.

When you run out of willpower, you essentially run out of brain fuel – glucose, and you must take immediate action to regain your willpower and your focus:

  • Rest or Nap – 20 to 30 minutes is all you need to restore your willpower reserves.
  • Eat a Sugar Snack – This quick fix should only be used in emergency situations because after 20 – 30 minutes you will find yourself even more depleted than before and your focus even more impaired than before.
  • Eat a Healthy Snack – This should be combined with rest or a nap, which will provide a maximum boost in willpower reserves, giving you another 90-120 minutes of focused thinking.

#5 Boredom

It is always very difficult to focus on anything you hate doing or that bores you. This is why I spend so much time writing and speaking about the need to find that thing that makes your heart sing and then figuring out how to monetize it.

When you like or love what you are doing, you turn up the volume on certain parts of the brain associated with emotions (amygdala, thalamus, hippocampus, hypothalamus, cingulate gyrus and ventral tegmental area). These emotional brain centers do not succumb to willpower depletion, which means you can focus for many hours without feeling fatigued.

#6 Poor Diet

Since the brain is such a heavy consumer of energy, a poor diet will deprive your brain of the nutrients it desperately needs in order to allow you to focus. Two out of every three meals should be vegetables with the third meal being high in protein (fish, lean meat, chicken).

#7 Inconsistent Exercise

Aerobic exercise is, next to sleep and diet, the third most important thing you can do for your brain. When you exercise aerobically, you feed your brain with oxygen, which is used by those cells to convert glucose to energy (Adenosine Triphosphate, or ATP for short).

If you are not exercising enough aerobically, that means you are not feeding your brain cells with enough oxygen, which then leads to an energy crisis inside your brain.

#8 Drugs/Alcohol

The use of drugs or alcohol causes the overproduction of certain neurotransmitters, such as dopamine. This throws the brain off kilter, making it nearly impossible to focus for any significant period of time. The problem is compounded with excessive use of drugs or alcohol. This puts you brain into permanent repair mode, which means it is using precious brain fuel for repair needs, leaving little left for focus needs.

Start Painting Your Masterpiece


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On October 18, 2000 Thomas Labrecque died at age 62. I knew Mr. Labrecque, so I was very sad at his passing.

His obituary highlighted only some of his accomplishments in life. Here’s a sampling:

  • US Navy Veteran where he served on a destroyer at Guantanamo Bay during the Cuban Missile Crisis and where he headed a section responsible for deploying ships in the blockade off Cuba
  • Graduate of Villanova
  • American University Graduate School
  • New York University Graduate School
  • Chase Management Trainee Program
  • Member of Chase Management Committee at just age 38, ten years younger than any previous member
  • President and CEO of Chase
  • Chairman of Chase’s International Advisory Council
  • Board of Trustees at the University of Notre Dame
  • Trustee of the Hospital for Special Surgery

There was much more, but I think you get the point.

Mr. Labrecque’s life was a masterpiece.

After reading Mr. Labrecque’s obituary, I remember thinking, “what the hell do I have to show for my life?

That question haunted me until 2004, which is when I began my Rich Habits Study.

That dream, to understand why some people are rich and some people struggle with poverty, pushed me in directions that completely changed the course of my life, and the portrait of my life.

And every day, thanks to my relentless pursuit of that dream, I am adding vibrant new colors to my portrait.

If I were to die today, I would be proud of my obituary.

If you were to write your obituary today, what would it say?

Would it make you proud?

Would a reader marvel at your accomplishments?

Would it be an exclamation point at the end of an amazing life?

We all have the same amount of time. We paint our life’s portrait by how we spend that time.

When your time is running out, the last thing you want to feel is regret – regret for not doing more with your life, for not utilizing your full potential.

Start painting your masterpiece today. Take that first step towards your new, amazing life. Take action on your dreams and your goals.

The pursuit and realization of dreams and goals are what transforms ordinary portraits into masterpieces.

Wealth Isn’t a Zero Sum Game – A Rising Tide Lifts All Boats


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There are a lot of people who just don’t like the rich. They believe rich people become wealthy on the backs of the poor.

Is that true?

Because, if it were true, they should be hated. Right?

My family had struggled with poverty from the time I was nine years old and I grew to hate the rich. I believed that the rich were responsible for most of the poverty in the world because they took advantage of the poor by keeping them in low paying jobs or by figuring out a way to take what little money the poor had.

There are, however, a lot of other people who don’t hate the rich. In fact, this other group admires the rich and aspires to become one of them.

“If he or she can do it, so can I”, was the youthful mantra of Australian self-made millionaire, Michael Yardney, who, at a very young age truly believed that he could one day become rich.

I happen know this self-made millionaire very well. Michael is the co-author of our bestselling book, Rich Habits Poor Habits.

Michael had a very different philosophy about wealth. He would often tell me that just because someone gets rich, that didn’t mean someone else gets poor.

And, as it turns out, Michael was right. Just take a look at what’s happening in China.

China’s emergence as a world economic juggernaut began back in 1978, when eighteen farmers from a small Chinese village called Xiaogang gathered in a mud hut to sign a secret contract. The farmers decided to divide up the land among the eighteen families. Each family agreed to turn over a minimum amount of produce required by the Chinese government. Any excess produce, above the government quota, went to the families.

At the end of the season, they had an enormous harvest. Yen Hongchang, one of the eighteen farmers, said that year’s harvest was greater than the previous five years combined.

Local officials soon learned what the farmers had done. Word of what had happened in Xiaogang made its way up the Communist Party chain of command.

At one point, Yen Hongchang was hauled in to the local Communist Party office. The officials swore at him, treated him like he was a criminal and threatened his life.

Fortunately, for Mr. Yen and the other farmers, there were powerful people in the Communist Party who wanted to change China’s economy from a socialist system to a capitalist one. Deng Xiaoping, the Chinese leader who would go on to create China’s modern economy, had just come into power.

Instead of imprisoning or executing the Xiaogang farmers, the Chinese leaders decided to hold them up as a model for all to follow.

Within a few years, farms all over China adopted the entrepreneurial principles in that secret document. People could now keep what they grew. Throughout China, record harvests on nearly every farm, resulted.

Encouraged by this success, the Chinese government launched other similar economic reforms, in other industries. China’s economic revolution had begun.

As of 2018, there were 819 billionaires and over 1.7 million, millionaires in China.

Since 1978, 500 million people in China have been lifted out of poverty and thrust into the middle-class.

JFK, a hero in my family, once famously said that a rising tide lifts all boats.

When you succeed in the pursuit of your dreams, that success doesn’t just lift you up, it lifts everyone up. It creates new jobs, boosts the economy and inspires others who have their own dreams, to pursue those dreams.

For those of you, like myself, who struggled with poverty growing up, don’t hate the rich. Wealth isn’t a zero sum game. If anything, wealth is a multiplier that helps lift people out of poverty.

Are You a Slave to Technology?


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Not too long ago, when families, friends or even co-workers gathered around a table, conversation dominated everyone’s attention. Today, as an independent observer, you would see that has changed – cell phones, not conversation, now has everyone’s attention.

And it’s doesn’t have to be a table. It could be a bar, coffee house, a stadium, theatre, park, a gym, the local diner, etc.

It also doesn’t have to be a cell phone. Since the 1950’s, watching TV became a daily habit for millions, replacing conversation and reading.

In the 1980’s, video games have slowly dragged kids in from libraries and ball fields, enslaving them to a video screen.

So too has computers and their latest apps. People now spend hours surfing Facebook, YouTube, Twitter, news feeds and other sites, in lieu of interacting with others, face to face.

New technology has a way of changing behavior. Whatever you were doing before the new technology, ends; replaced by the latest technology.

The change is subtle at first. But after enough time, that change in behavior grows, eventually becoming a habit.

There are many ways to thwart the technology habit:

  • Cell Phone Baskets – This is where the cell phones go every night, while the family is having dinner, sharing information about their day.
  • Media Fasting –  Isolating two or three nights a week where everyone in the family disconnects from video screens, allowing the family to spend quality and quantity time with each another.
  • Weekend Hikes – Weekend days spent hiking with the family, distracted only by nature and each other.
  • Library Excursions – Taking the kids to the library once a week, re-installs the reading habit.

Awareness of how new technology alters your daily behavior is the key to preventing that technology from consuming your life, disconnecting you from those you love and becoming a time-wasting Poor Habit.

Health Savings Arrangements Are a Rich Habit

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A Health Savings Arrangement (HSA) is a tax planning tool that offers many tax advantages.

Why Would You Set Up an HSA?

  • The amounts you contribute to an HSA, every year, are tax deductible. You have up to April 15 to make your HSA contributions for the prior tax year.
  • You can also make pre-tax contributions to an HSA, if you are a participant in an employer-eligible HSA plan. These pre-tax employee contributions are not subject to income tax, social security tax or unemployment tax.
  • You can invest your HSA money in mutual funds, bonds, annuities, stocks, etc. Investment gains within the HSA are not taxed.
  • You can make tax-free withdrawals from your HSA for the following:
      • Qualified Medical Costs
      • Qualified Dental Costs
      • Qualified Vision Care Costs
      • Qualified Long-Term Care Costs
      • Health Insurance Premiums
      • Employee Health Insurance Premiums
      • Medicare Part ! Premiums
      • Medicare Part B Premiums
      • Medicare Part D (Prescription Drugs) Premiums
      • Medicare HMO Premiums
      • Medicare Advantage Premiums
      • Long-Term Care Premiums

How Much Can You Contribute to an HSA each year?

The amount you can contribute to an HSA can change every year, due to inflation. For 2019, the maximum contribution amounts are as follows:

  • Single HSA Plan – $3,500
  • Family HSA Plan – $7,000

One More Benefit

Once you reach 65, you become ineligible to contribute to an HSA. However, you can make non-qualified withdrawals without being subjected to the 20% penalty. The non-qualified withdrawal, however, will be subject to income tax.

In effect, you can use HSAs as a supplemental retirement plan.


There are certain penalties to be wary of with respect to HSAs:

  • Non-Qualified Withdrawals – If you are under age 65, any non-qualified withdrawal is subject to a 20% penalty and the withdrawal is also subject to income tax.
  • Non-Qualified Contributions – If you make non-qualified or excess contributions, you will be assessed a penalty of 6% each year until you cure the violation. You cure it by withdrawing the disallowed or excess contribution.

Ending This Poor Habit Will Make You a Multi-Millionaire


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Slickdeals, an online couponing site, commissioned a survey of 2,000 American adults in an effort to better understand impulse purchases.

One startling find was that the average American engages in three impulse purchases a week. This impulse spending habit costs the consumer about $450 per month, $5,400 per year and $324,000 over their lifetime.

Now, let’s flip the switch on this. What if you were an average 25 year old who didn’t have this Impulse Spending Poor Habit and, instead, invested that $5,400 every year in something that grew at a rate of 6% a year?

After sixty years, that 25 year old would have $3,057,026.

Eliminating one Poor Habit, Impulse Spending, and adding one Rich Habit, Saving $5,400 a year, would make the average person a multi-millionaire over the course of their lifetime.

Habits are the reason your are rich or poor.

Habits are the reason you are lean or overweight.

Habits are the reason you are knowledgeable or ignorant.

Habits are the reason you are skilled or unskilled.

Habits are the reason you are healthy or unhealthy.

Habits are the reason you have an abundance of friends or very few friends.

Habits are the reason you live in a home by the beach, or a shanty in the inner city.

Habits matter. They determine the quality of your life.

You’re in a War You Didn’t Know You Were Fighting


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Go to school, get good grades, go to college, get a good job after graduating college, get a car, get engaged, have a wedding, rent an apartment, furnish that apartment, after three years – buy a home, furnish that home, have 2-3 children, buy a bigger home further from work, buy a 2nd car – a van or SUV, every five years buy or lease new cars, commute 30 – 50 minutes to work from your bigger home, repair and improve your bigger home, repair your cars, enroll your kids in sports, take vacations, send your kids to college, retire.

These are the stages of life for many around the world.

At each stage, is a battle for your time, your money and your mind.

At each stage, your enemy seeks to force you into certain habits that ensure they win the battle for your time, your money and your mind.

Their weapon of choice is habits.

Their goal is to force you into habits that will enable them to capture your time, your money and your mind:

  • Bankers – The habit they force upon you is the Debt Habit. They offer debt to help you fund each stage of your life. Once that Debt Habit is forged, they win the battle for your future earnings.
  • Retailers – The habit they force upon you is the Spending Habit. They offer you products to purchase at each stage of your life. Once that Spending Habit is forged, they win the battle for your current and future money.
  • Media – The habit they force upon you is the Time Wasting Habit. They offer you content to watch, hear or listen. Once that Time Wasting Habit habit is forged, they win the battle for your mind.

These enemies use habits to enslave you for life.

But there’s a new counter-weapon that can turn the tables on your enemies. This counter-weapon is called Rich Habits. And I am its commander-in-chief.

Don’t surrender to your enemies.

Don’t become their slave.

Join my army.

And win back your freedom!

Entrepreneurs Get New 20% Tax Deduction

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There’s a new tax deduction available for sole proprietors, S Corporation Shareholders, LLC Members, Real Estate Investors and Partners (Pass Through Businesses). It’s called the Qualified Business Income Tax Deduction.

If you qualify, you can get a deduction equal to 20% of the taxable profit from your business for calendar years beginning in 2018. [Read more…]